CLIFF NOTES: couple days ago, posted the “chart of my lifetime” and it showed a very long term pattern completing on the Dow Jones Transports:
We did have a break down after levels were hit and, on an intraday basis, a 5 wave count down can be seen. The BIG QUESTION: is that the top of a big correction or resumption of a bear trend? Who knows .. it was a pattern and they either 1) work or 2) don’t …so, to put it in context I have attached a long term MONTHLY chart of the S&P cash and show the POTENTIAL PATTERN (bearish) at play and then go all the way down to a 5 minute chart to show how the lower time frames might be giving us a warning of what is coming OR not ….
either way, it’s all about the swing low and STRATEGY of either 1) taking profit or 2) moving stops up or 3) trying to get short … believe the charts below can serve as a road map.
one last thing … keep in mind the past couple months of charts. not ONE has shown a BUY pattern and 5 wave counts are everywhere (FB, AMZN, LNKD, BIDU, etc), parabolic charts are everywhere (PCLN, TSLA, IBB, GOOG, etc) and indices are completing all kinds of patterns (SELL) on decreasing volume. Not to mention there is absolutely NO FEAR in the market and EVERYONE surveyed is bullish. Margin debt is a big deal and the geo political environment is always a big deal … folks, it’s time to be very prudent in allocation, stop placement (if long) and for goodness sakes don’t listen to the talking head TV pundits …
Very informative! I have sold out of most of my long positions at the moment. I rather lose 5% upside than take a large hit. I have taken some short position with tight stops. Excellent chart work Bart. Alex
Alex,
thanks for the compliment … keep an eye on the swing lows and, most importantly, weekly and monthly. Also, cycles point to the next 2 weeks as extremely volatile. What does that mean … well, could be nothing or could get very interesting. keep the questions and comments coming and I will try to get to them as soon as I can. make it a great weekend. BART